Jensen Huang has abruptly resigned as chief executive of AI chip manufacturer Nvidia, ending a leadership tenure that began in 1993. The departure follows the public emergence of personal scandals that have rattled the company’s valuation and triggered intense scrutiny from Washington officials regarding potential national security implications. A personal representative of Huang also declined to comment on Thursday.
The controversy centers on revelations of extramarital affairs, specifically reports linking Huang to Alice Huang, a Singapore-based executive at the firm Megaspeed who has been described in media reports as a suspected Chinese intelligence asset. According to the New York Times, she has been suspected of being an intelligence asset for China. China has rejected that allegation as a smear.
While China has dismissed these claims as smears, US Attorney General Todd Blanche stated Thursday that the Department of Justice has not reached any conclusions regarding whether Alice Huang was involved in espionage.
Adding to the internal crisis, reports surfaced Wednesday regarding a second alleged affair involving a long-time Nvidia executive, Kimberly Powell, who reported directly to the CEO. Watch: What we know so far about Nvidia CEO resignation.
The fallout has been immediate and severe for the tech giant. Nvidia has lost $550 billion, or £415 billion, in market value over just five days, marking the company’s most significant five-day decline since its public debut 27 years ago. This drop is particularly consequential because Nvidia’s market value represents approximately 7% of the S&P 500 index, a benchmark heavily utilized in American retirement savings accounts. Overall, the company’s stock has fallen by 31% amid broader tech sector uncertainty, erasing a portion of the 470% gain the company experienced over the last five years. Peaking just a few weeks ago, its market value rose by more than 470% in the past five years. It is now down by 31% against a backdrop of wider uncertainty in the tech sector.
Interim CEO Colette Kress has convened an emergency meeting of the executive leadership team to navigate the company’s future.
While the board has launched an independent inquiry to determine if the CEO was a target of foreign intelligence efforts, the company maintains it has no reason to believe national security or company secrets were compromised.
Regardless of the findings, the situation has mobilized US lawmakers.
Senators Elizabeth Warren and Chris Coons, alongside Democratic members of the House Foreign Affairs Committee, have demanded that Huang brief Congress.
Senate staff have indicated that failure to appear voluntarily could lead to a subpoena. He could be subpoenaed, one Senate staff member told, if he refuses to appear voluntarily before any committee that calls him.
Within the workplace, the mood has shifted significantly. While employees initially dismissed reports of infidelity, the disclosure of the second alleged relationship with an internal executive caused widespread alarm among the staff. Sources close to the company noted that employees had observed the pair acting with unusual familiarity. Workers have been instructed to refrain from commenting publicly on the matter, even as many staff members deal with the financial impact of the company’s sudden stock volatility, having previously built significant wealth through stock compensation. Many staff have earned millions of dollars in compensation through their ability to cash out their Nvidia shares as the stock soared.
Jensen Huang, who has been married to his wife, Lori, for four decades, now faces a period of intense scrutiny. Both of the couple’s children are employed as executives at Nvidia. As the company hunts for a permanent replacement, the tech industry in Silicon Valley and beyond is grappling with the downfall of a leader who was instrumental in the AI boom. Experts in the Bay Area note that while tech titans including Bill Gates and Jeff Bezos have faced similar public controversies in the past, the intersection of national security concerns and corporate governance makes the Nvidia situation unique. But has made Nvidia the target of questions from US politicians who have expressed concern about national security risks, his alleged conduct not only potentially crossed professional boundaries. Huang has been married to Lori Huang for 40 years. Who became a major booster of the AI industry, which relies on Nvidia for the powerful computer chips it manufactures, the company’s meteoric rise had been led by Jensen Huang. Companies building AI tools suddenly required huge numbers of the Nvidia computer chips that could process large amounts of data, but as AI technology evolved in the last four years into chatbots and large language models. An area filled with tech employees, industry executives and billionaires, several tech insiders that spoke with this week noted that Huang’s downfall has been a major topic of conversation in San Francisco Bay area circles.
